Relief Rally
The stock index futures markets appear to be in the midst of a “relief rally.”
Even though Intel
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PowerRating) made a negative statement when it released earning yesterday — with a forecasted 15% slowdown next quarter — the stock was actually above to move higher. With the rest of the market responding, it shows that this market is not reacting negatively to bad news. So if we can avoid the bombshells, it appears we’re moving higher.
This morning, S&Ps were up 1610 at 1351.60. The market moved higher on the CPI report, with a headline rate that met expectations and a core rate that was a touch weaker than estimated.
On the upside, our targets are 1355, 1359, 1363.50, 1367 and then 1370, which would be the high from the day of the surprise Fed rate cut earlier this month. On the downside, we have 1350 then a key area of support at 1348.50 through 1346.50. Below that, we have 1343.50 and 1341.50.
NASDAQ was limit up this morning at 2580.50. We have resistance from 2600 to 2625. Above 2625, we have our target of 2650. If we get above that, the target is 2700. Our main area of resistance is going to be 2645 to 2660.
We have support between 2545 and 2535. Under that, look for 2500 to trade, which would fill the gap. We have good support between 2520 and 2500. If this were to be broken, it should lead to further selling, and a reversal of this up move.
As for the Dow, a number of components have reported earnings this morning. In general, most companies have been right in line with expectations. We still hold the same thought — above 10,800 we like this market and below 10,400 we don’t.